The Conference Board forecasts that Canada's provinces will avoid an economic recession this year though growth is expected to be sluggish leading into 2024.
The economic forecasting organization said in its latest provincial outlook that Canada will see limited economic growth this year and will likely experience one quarter of contraction.
However, it is increasingly unlikely that provinces across Canada will suffer two consecutive quarters of economic contraction, which is the technical definition of a recession.
The latest gross domestic product (GDP) data released by Statistics Canada showed that the economy is slowing, with fourth quarter GDP growing a slight 0.2% year-over-year.
Higher interest rates used to lower inflation are conspiring to slow Canada’s economic output, said the Conference Board, though a full-blown recession seems unlikely in the year ahead.
Despite the Q4 slowdown, Canada’s economy has grown for six consecutive quarters.
The Conference Board report said that inflation is coming down and that Canada is now in a period of restrictive interest rates.
Among Canada’s provinces, Newfoundland and Labrador is forecast to have the fastest-growing economy in 2023 as offshore oil production gathers steam. The Conference Board is projecting that Newfoundland and Labrador's GDP will rise 2.2% in 2023.
Alberta and Saskatchewan will also perform well this year, powered by the oil and gas sector and favourable outlooks in agriculture, according to the Conference Board.
Quebec and New Brunswick are forecast to have flat economic growth this year before returning to expansion in 2024.
